Genius Sports shares plummeted 23% as of noon ET on Thursday. The company announced it was acquiring Legend, a digital sports and gaming media network, for up to $1.2 billion.

Genius Sports will pay $800 million in cash (from a debt offering), $100 million in stock, and potentially $300 million more in earn-outs. With a market cap of just $1.5 billion, the sheer size of this deal seems to worry the market, especially given that the company is yet to reach profitability.

Management believes the combined company will see sales more than double from $669 million in 2025 to $1.6 billion in 2028. Similarly, they expect adjusted EBITDA to spike from $136 million in 2025 to $550 million.

Should Genius deliver figures anywhere close to these expectations over the next few years, its stock could skyrocket. However, due to the shareholder dilution and increased debt load needed to fund the deal, Genius Sports’ stock outcomes look quite binary. Either the deal will be a major boon for the company, or Genius Sports will be in a tough financial position.